Amneal Pharmaceuticals Acquires Majority Stake in AvKARE for $340 Million to Expand Federal Healthcare Presence

VCBeat (WeChat ID: vcbeat) learned from foreign media that on December 12, 2019, local time, Amneal Pharmaceuticals (Amneal) (NYSE: AMRX) announced the acquisition of a 65.1% stake in generic drug supplier AvKARE for $340 million. Upon completion of the transaction, AvKARE will operate independently as a subsidiary of Amneal.

SunTrust Robinson Humphrey served as Amneal’s financial advisor, with Bank of America Securities and RBC Capital Markets also providing financial advice to Amneal. Morgan, Lewis & Bockius acted as Amneal’s legal counsel. Raymond James and Frost Brown Todd served as AvKARE’s financial advisor and legal counsel, respectively.

AvKARE, established in 2007 and headquartered in Tennessee, USA, is a licensed manufacturer and wholesaler of pharmaceutical products, serving a diverse clientele that includes government agencies and commercial organizations. The company also serves as a supplier of generic drugs to U.S. federal agencies.

AvKARE’s clients include the U.S. Department of Defense (DoD), the Food and Drug Administration (FDA), the Veterans Health Administration (VHA), the Indian Health Service (IHS), the Department of Health and Human Services (HHS), as well as group purchasing organizations such as Ameritnet, Innovativix, and IPC.

Currently, AvKARE has partnered with more than 50 generic drug suppliers to offer a range of specially packaged products under its private label. Its product and equipment portfolio includes medical surgical services, wound care services, pharmaceuticals, medical devices, and laboratory supplies.

Amneal, founded in 2002 and headquartered in New Jersey, USA, is an integrated specialty pharmaceutical company focused on the development, manufacturing, and distribution of generic and specialty medicines. The company operates manufacturing facilities in North America, Asia, and Europe and maintains a broad product portfolio comprising more than 300 generic drugs. Currently, Amneal is expanding its portfolio to include biosimilars across multiple therapeutic areas, including complex dosage forms. Additionally, through its specialty division, Amneal markets a portfolio of branded pharmaceuticals, with a primary focus on central nervous system disorders and endocrine diseases.

AvKARE is the second-largest generic drug distributor to the U.S. Department of Veterans Affairs (VA) and the Department of Defense (DoD). The acquisition of AvKARE will enable Amneal to expand its existing operations in the VA and DoD generic drug markets.

Chirag Patel, Co-Founder and Co-CEO of Amneal, stated, “In August this year, we outlined our long-term strategic vision for Amneal. While we remain deeply focused on organic growth, we also recognize that mergers and acquisitions (M&A) will be a key driver of our expansion. We aim to leverage M&A to complement Amneal’s existing distribution network, providing us with sustainable and recurring revenue streams that ultimately support our revenue growth objectives. The transaction with AvKARE meets all these criteria, and we are excited about the value it will create for our patients, shareholders, and other stakeholders.”

In accordance with customary practice, the transaction remains subject to approval by the relevant regulatory authorities and is expected to be completed in early 2020.

(Compiled by: He Li)